Budgeted Cost of Goods Manufactured
Cost of goods manufactured (COGM) is the total of the costs directly attributable to producing items brought to completion in the manufacturing process during the period. For each unit brought to completion, cost of goods manufactured includes the direct material and direct labor costs of the unit and an allocation of a portion of manufacturing overhead costs.
Budgeted cost of goods manufactured is calculated using the following formula:
| Budgeted Direct Materials Used | |
| + | Budgeted Direct Labor Used |
| + | Budgeted Manufacturing Overhead Applied |
| = | Budgeted Total Manufacturing Costs |
| + | Budgeted Beginning Work-in-Process Inventory |
| – | Budgeted Ending Work-in-Process Inventory |
| = | Budgeted Cost of Goods Manufactured |